The Federal Opposition has criticised theAustralian Securities and Investments Commissionfor providing an exemption from the Financial Services Reform regime to mortgage brokers who provide advice on offset accounts.
The Opposition spokesman on Financial Services, Senator Stephen Conroy says ASIC’s decision will undermine the regulatory framework applying to the financial services industry.
His warning has come at the same time as ASIC has confirmed granting class order relief for mortgage brokers from the licensing requirements under the Corporations Act 2001 in relation to offset accounts, on the condition that the provider is a member of an eligible external dispute resolution scheme.
“In Labor’s view, offset accounts are financial products and therefore anybody who is advising on them or dealing in these products should be subject to the FSR regime, even though they are linked to credit facilities which do not fall within the FSR regime,” Conroy says.
He says consumers have been left with significantly less protection when dealing with mortgage brokers now that offset accounts are outside the scope of the FSR regime.
“Labor is concerned that the Government’s and ASIC’s willingness to cave into the mortgage brokers as well as other interest groups is undermining the consistency of regulation in relation to financial services and that the FSR regime will end up with as many holes as a Swiss cheese,” Conroy says.
